Google Buying Monster.com?

[orion]

Google Buying Monster.com?

A persistent rumor in Wall Street says that Google is interested in buying Monster.com.

http://home.businesswire.com/portal/... 4&newsLang=en

If true, this is not surprising. After a successful ipo the next phase is called DTA (diversification through acquisitions). Monster.com is a fair and good target.

How do you think this will play into the Yahoo!/MSN/Google fight for market share?

Orion

[Papadoc]

It's true that G needs to diversify. All of their eggs are now in the advertising basket which leaves them terribly vulnerable. It's too early for much speculation on where they would go with this but whichever direction, they will make waves.

The critical things are that they cannot be perceived to use their clout to go after competitors of any business that they acquire. How suspicious would it be if CareerBuilder suddenly stopped doing so well with Google? The second is that they cannot take their eye off the ball as Yahoo did. Y! got into everything and search shows it. While they acquired much, they virtually gave their search market share to Google.

[AussieWebmaster]

I find Monster a bit more of a stretch than DoubleClick... persoanlly they should grab a few small engines... 7search, searchfeed and business.com would be smart moves... and blowsearch has great targeting...

[Nacho]

First, with all their growth plans that might help them save good money by not paying high shares to headhunters.

Second, they will get a first take/pass to new and available valuable people ready to work.

Third, just think of the value of this database of people with so much information. . . . you know "organizing the world's information and making it universally accessible and useful."

[orion]

According to this MSNBC story

http://msnbc.msn.com/id/5797260/

this is more than a rumor. MSNBC writes

"Jim Treacy, a former Monster senior executive and a current shareholder, told Barron’s he thinks the company could fetch at least $30 per share, if CEO Andrew McKelvey decided to sell. But McKelvey told Barron’s he sees great opportunities ahead for Monster.

“The only reason to sell is if a buyer can get you where you need to go quicker,” he told Barron’s."

The MotleyFool site writes http://www.fool.com/news/mft/2004/mf...npu=y&bounce=y

"Stating that Monster Worldwide might be a possible takeover candidate is purely speculative at this point. Neither CEO Andrew McKelvey, who controls one-third of the voting rights, nor the two largest institutional holders have shown any inclination to sell. However, an offer with a substantial premium attached might be difficult to ignore. As always, prudent investors should first take a hard look at fundamentals before rolling the dice on rumors."

Certainly if Google buys Monster.com they will get a huge database for a different kind of potential ads. Let me elaborate on this marketing idea.

Imagine an ad service consisting of contextual job offers next to your current reading. I can see a lot of potential and opportunities here, not only for those looking for jobs or for job providers but for SEMs as well.

Orion

Correction: I incorrectly attributed the above statement to Jim Treacy. Sorry, I was typing too fast. These were statements attributed to Monster's CEO. I have edited the line and expanded on it. My apologies.

[Papadoc]

Originally Posted by orion

Imagine an ad service consisting on contextual job offers next to your current reading. I can see a lot of potential and opportunities here, not only for those looking for jobs or for job providers but for SEMs as well.

Orion

Or taking it a step further, licensing the content to fledgling job boards or other sites that are looking to add content... DMOZ style! Do that and they would all but own online employment, leaving Y! choking on a bit more dust.

[Nacho]

Originally Posted by orion

Imagine an ad service consisting on contextual job offers next to your current reading. I can see a lot of potential and opportunities here, not only for those looking for jobs or for job providers but for SEMs as well.

Orion, you're amazing . . . That's Brilliant!

[orion]

Hi, Papadoc.

Good post. Yeah, that's was it was buzzing in the back of my head. Well put. I was typing too fast while that was hitting my brain. Not an excuse, but it may explain why I mistake names, above. I made a correction to who says what.

Whether Google buys or not Monster, I think the above is an interesting marketing goldmine.

Orion

[orion]

Hey, Nacho.

Gracias, mi amigo.

Orion

[AussieWebmaster]

some interesting ideas... hopeful someone is listening

[seobook]

Originally Posted by AussieWebmaster

I find Monster a bit more of a stretch than DoubleClick... persoanlly they should grab a few small engines... 7search, searchfeed and business.com would be smart moves... and blowsearch has great targeting...

I can't see them wanting stuff that has an editorial directory involved with it like business.com...too much of a conflict of interest with their "completely algorithmic" search approach.

also I think buying up a ton of small search engines is a bad idea.
- when they bought Sprinks they did not immediately incorporate its technology.
- buying a buch of various search sites would remind people that "there are search sites other than Google," and that perhaps could have a negative impact on their branding.

Originally Posted by Papadoc

Or taking it a step further, licensing the content to fledgling job boards or other sites that are looking to add content... DMOZ style! Do that and they would all but own online employment, leaving Y! choking on a bit more dust.

completely brilliant!!! (at least as far as I can see)

[AussieWebmaster]

I agree that making people aware of other engines is not wise... but they can't have an ostrich's view of the industry...
Some of these engines have technology that could improve users and advertisers experiences and improve ROI and results.

[orion]

I agree with Aussie. Today, I contacted Monster, Careerbuilder, Yahoo and other search engines with the idea presented in post #5; of syndicating job services as contextual ads. It is hard for me to understand why their marketing "gurus" did not provide this service before. There is a lot of money to make for both SEs and SEMs.

Let see if they are listening.

Orion

[andrewgoodman]

Since when does Steve Harmon's opinion combined with denials from the Monster CEO and anyone else connected with the company add up to any sort of acquisition rumor? What am I missing here?

And... 7search? Google needs this why?

[AussieWebmaster]

Originally Posted by andrewgoodman

Since when does Steve Harmon's opinion combined with denials from the Monster CEO and anyone else connected with the company add up to any sort of acquisition rumor? What am I missing here?

And... 7search? Google needs this why?

7search has quietly built a solid base of publishers for the business vertical. Obviously the largest percentage of the advertisers are more than likely doing Google ads as well... but you get some more clients and what appears to be a solid base of search syndication areas.
Ultimately this whole search industry becomes who has the best syndication of sites... and who can provide them at the optimum number.

[orion]

As the MotleyFool site put it, this is so far a rumor. However, this is a "rumor" in the Wall Street sense.

The way I see it, this is more about how rumors play into Wall Street than about Steve Harmon. Some "rumors" may lead to "whisper" numbers (http://news.com.com/2100-1023-239382.html?legacy=cnet), thus, are important as they often play with forecasts and even pump-and-dump decisions.

McKelvey (Monster's CEO) owns only about 10 % of the shares while two institutional holders, Capital Research and Fidelity Investments, control 30 % of the shares (http://www.financialexpress.com/late...ntent_id=66723), so who knows what will happen.

Either way, it is interesting to watch, from a WS sidewalk while having lunch at a kiosk. BTW, Here are some trading figures. Results change over time. Column sequence is Symbol, Time, Trade, Change, % Change, Volume.

MNST || 2:40PM ET || 20.20 || 0.31 || -1.51% || 413,335
GOOG || 2:40PM ET || 107.51 || 1.51 || +1.42% || 2,857,388


Orion

[Webvisitor]

Why buy Monster? They can just put out a version of their own and call it Gjobs. Monster should be frightened by this prospect.

On smaller engines. Why? Their syndication streams are in place with many as in Mamma through Ask Jeeves. As long as this is working I can't see them moving too heavily in this direction.

I do see them buying an ad company. DCLK or VCLK or even a high profile Madison Avenue agency. Off web exposure which will in turn push people to Google. An example would be broadcast and print ads produced by Google which further promotes the brand.

[orion]

Welcome to this thread, Webvisitor. You have formulated very good questions.

I should have call this thread "Wall Street SE Rumors", ie. to post on how "rumors" -in the Wall Street sense- affect stock trading and SE businesses. This kind of "rumors" are different from the general notion of rumors.

Unlike MNST, DCLK and VCLK themselve are acquiring search-related companies. Consequently, DCLK and VCLK investors are very bullish. Some things to be considered are given below.


DCLK RECENT ACQUISITIONS: Performics, SmartPath and Computer Strategy Coordinators

According to their 10Q, http://biz.yahoo.com/e/040809/dclk10-q.html

"Performics Inc. On June 22, 2004, we completed our acquisition of Performics Inc., a privately-held search engine marketing and affiliate marketing company based in Chicago, Illinois for approximately $58.2 million in cash. Pursuant to the merger agreement, Performics has the right to receive up to an additional $7.0 million based on the attainment of certain 2004 revenue objectives. Performics' search engine marketing solutions are designed to help clients automate their paid placement, paid inclusion, and comparison shopping listings across multiple search providers and publishers. Performics also provides the infrastructure for affiliate marketing, through which marketers manage, track, and report on their offers across multiple affiliate sites.

SmartPath, Inc. On March 19, 2004, we completed our acquisition of SmartPath, Inc, a privately held marketing resource management, or MRM, software company for approximately $24.1 million in cash.

Computer Strategy Coordinators, Inc. On June 30, 2003, we completed our acquisition of Computer Strategy Coordinators, Inc., or CSC, a data management company. In the transaction, we acquired all of the outstanding shares of CSC in exchange for approximately $2.8 million in cash and the assumption of certain indebtedness."


VLCK RECENT ACQUISITIONS: PriceRunner

I haven't check their 10Q, but according to http://biz.yahoo.com/ap/040810/value...erunner_1.html they just completed the acquisition of privately-held Pricerunner AB, a provider of online comparison shopping services in Europe, and raised revenue guidance for the third quarter and full year.


MNST 10Q

One good reason for acquiring Monster is this source of information found in their 10Q http://biz.yahoo.com/e/040806/mnst10-q.html

"In January 2003, Monster Government Solutions was awarded a contract by the U.S. Office of Personnel Management ("OPM") to overhaul and operate the USAJobs website. This contract, renewable annually at OPM's option, could potentially run through the year 2013 and be worth up to $62 million. In July 2004, OPM announced that it will hold a new competition for the USAJobs contract. Press reports have suggested that the contract up for bid will be for one year, with the option of four one-year renewals. Press reports have also indicated that OPM simply wishes to re-evaluate the market place and is extremely pleased with our work. We will bid on the new contract and believe that we will remain OPM's partner of choice."

Imagine this database of info in good hands! So, why reinvent the wheel? Again these are WS "rumors". Who knows what Google has in mind.

Orion

[Papadoc]

Originally Posted by Webvisitor

Why buy Monster? They can just put out a version of their own and call it Gjobs. Monster should be frightened by this prospect.

There are many reasons why one company buys another. Monster isn't afraid of much at this point. Banks, Internet companies, railroads, and phone companies can all, "build their own". But many times, it is more advantageous to buy an existing company.

1) It takes time to develop a technology, get distribution, and there are proprietyar tools and patents involved.

2) Buying the contracts of key employees and having a staff in place.

3) Buying a databased of X number of postings already in place.

4) Buying out a competitor who pretty much has their place in the market secured.

5) Buying their database of current and former clients

6) The value of the free press coverage they receive.

7) Monster would not get beat, much less silently. It would cost both companies a great deal of money. Monster would not keep it all, and Google would not get it all.

8) Sometimes a company is just undervalued at the moment.

9) Monster has a wonderful brand that even people who are not computer/Internet literate know. While G also has such a brand, it is not a brand associated with jobs.

10) Google would not have to buy every piece of stock out there, just a controlling share. There are reasons why you do buy the whole company, but in others, you simply want to call the shots.


The list of reasons goes on and on...

[seobook]

Originally Posted by Webvisitor

Why buy Monster? They can just put out a version of their own and call it Gjobs. Monster should be frightened by this prospect.

Google mail goes by Gmail...part of that is that they sell the concept "search your email"

as you spread out a brand you lose the strength of your brand.

when Heinz became ketchup they eventually lost the pickle brand to Vlasic.

being known as THE ROADMAP TO THE WEB is branding worth a ton of money, and Google may not want to spread that brand too thin (else they risk damaging that brand position).